The USD/MXN currency pair continued its downward trajectory for the 14th consecutive day, declining by 0.08% as the Mexican Peso traded near a 24-month low of 17.01 on Thursday [1]. At the time of reporting, USD/MXN was trading below 17.05, with market participants digesting recent soft US inflation figures on both the consumer and producer sides [1].
Technical analysis indicates that after breaking below the 50- and 100-day Simple Moving Averages (SMAs) at the end of July, USD/MXN accelerated its decline to reach yearly lows. The market structure of lower-highs and lower-lows remains intact, and a breach below the 17.00 level could pave the way for further downside, with potential targets at May’s 2024 monthly low of 16.52, April’s 2024 low of 16.26, and ultimately the 16.00 support level [1].
However, the Relative Strength Index (RSI) suggests the downtrend may be losing momentum, as the rate of change between sessions has narrowed. This indicates that traders are hesitant to initiate new directional positions, which could lead to a period of consolidation before the next significant move. Alternatively, USD/MXN may have found a floor and could reverse course, with resistance levels at the 50-day SMA (17.38), 100-day SMA (17.40), and 200-day SMA (17.59) if a rally ensues [1].
No explicit market reactions or analyst opinions were provided regarding the broader implications, but the technical outlook highlights key levels to watch for potential future moves [1].
CONCLUSION
USD/MXN remains in a pronounced downtrend, hovering near the critical 17.00 level as traders weigh recent US inflation data. Technical indicators suggest either a possible consolidation phase or a reversal, with key support and resistance levels identified for future price action. Market participants are advised to monitor these levels closely for signs of a breakout or trend reversal.